Message Boards Digest

July 18, 2022

Here are the most recently added topics on the BenefitsLink Message Boards:

Jakyasar created a topic in Retirement Plans in General

Profit Sharing Plan -- Partial Termination Determination

"PS plan, first year (combo with CB). Vesting starts with plan inception, i.e., no prior service is recognized. Vesting is 6 year graded, 2/20. 11 total participants during the year, some entered at BOY and some entered mid-year. Last day and 1000 hour requirement for contribution.

5 terminated during the year-- some left, a couple were fired, but all replaced with new employees during the year. Out of 5 terminated, need to include 2 to pass testing.

Doing 11-g corrective amendment. Do I need to 100% vest or just partially vest? I am aware that some would 100% vest under 11-g rather than partial vest but do partial termination rules override here?"

8 replies so far   |    Click Here to Add a Reply

EBECatty created a topic in Governmental Plans

Age/Service Exclusions in Pre-Approved Governmental Plan

"The FIS Relius pre-approved governmental 401(a) DC plan document includes the standard override when excluding temporary and part-time employees such that, if an employee in this group actually works 1,000 hours in a year, they become eligible despite being in a category of temporary or part-time employee.

The only source of this rule that I'm aware of is found in 410(a). Under 410(c), governmental plans are exempt from 'this section,' i.e., all of section 410, including section 410(a), not just 410(b) minimum coverage requirements.

Is there some other rule that would require including this override in a governmental plan? Or might this have been just a design choice by the document provider? Or perhaps a provision the IRS required as a condition to pre-approval?"

3 replies so far   |    Click Here to Add a Reply

EPCRSGuru created a topic in Retirement Plans in General

Compensation Paid in Advance

"I have a situation where a division of my company is proposing to pay an employee in 2022 for services rendered for the period 9/2022 through 6/2023.

Besides the obvious downsides involving how advance pay is reflected on the company's books, the risk if employment terminates before 6/2023, and possible problems with IRS caps on compensation and contributions, I recall there is some specific reason why qualified plans cannot consider accelerated compensation when determining compensation.

We have a money purchase and a 401(k) plan.

I have been searching but have not found anything but I recall this coming up with clients in my previous job. Can anyone point me to a cite?"

2 replies so far   |    Click Here to Add a Reply

ratherbereading created a topic in 401(k) Plans

Divorced Spouse Not Removed as Designated Beneficiary

"Divorced plan participant dies. QDRO money was allocated to the ex-wife a few months ago. Plan participant died last week. His designated beneficiary is still the ex-wife. No updated beneficiary form had been completed. She's entitled to his 401k, correct? His contigent benficiaries are his 2 sons."

6 replies so far   |    Click Here to Add a Reply

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